Government reviews AFP pension reform proposal

MANILA, Philippines — The Marcos administration is reviewing its pension reform program for the military and uniformed personnel (MUP) as it braces for bigger expenses for the program due to upward adjustments in the basic pay of those in active service.

The pension of retired uniformed personnel is automatically indexed to the salary of active personnel of the same rank. This means that the pension of a retiree would increase if the basic pay of an active personnel of the same rank increases.

Budget Secretary Rolando Toledo said P6.3 billion has been allocated for the pension hike in this year’s national budget.

The amount forms part of the P21.7-billion allocation for the first tranche of base pay adjustment, of which P15.4 billion would be for the salaries of active personnel.

“That (reform) was (proposed) many years ago so there are developments that happened during this administration. So, I think, that is subject to study again,” Toledo said at a Palace briefing yesterday.

But he assured the MUPs that the 2026 spending plan prioritizes the welfare of those who “safeguard the nation – despite exhaustion, sleepless nights and time spent away from their families.”

“The message of the 2026 National Budget is clear: we see you, we hear you and we will never abandon you,” Toledo said, addressing MUPs.

“This is not written on water – this is certain, and funding has already been set aside,” he said.

Apart from the base pay hike, the subsistence allowance would be increased to P350 per day from P150, effective Jan. 1. The Department of Budget and Management said P71.5 billion has been allocated to ensure the continuous implementation of the higher allowance.

“The increase in the subsistence allowance is not a luxury and not a favor – it is recognition that those who guard the nation must have sufficient food, strength and daily nutrition,” Toledo said.

Some experts have expressed concern over the impact of the automatic indexation of pension to the salary of active personnel, saying it could leave the government’s financial obligations to retirees bloated amid a limited fiscal space. - Keisha Ta-asan, Ed Amoroso